The Californian company had been under intense pressure to deliver strong results given the almost 30pc drop in its share price since the $104bn (£66bn) flotation in May.

Although revenues climbed 32pc to $1.18bn in the second quarter, beating analysts' estimates, it failed to convince investors who had seen saw revenues climb 45pc in the first quarter. At the same time its spending on sales and marketing more than tripled to $392m in the period.

Ian Maude, head of Internet at Enders Analysis, described Facebook’s first results as the moment which investors finally "got to see the money and the real state of affairs".

“This is the proof that there is a social media bubble,” he said. “Those investors who piled in at $38 were on a hiding to nothing. Revenue growth even before Facebook’s IPO wasn’t there to support that valuation. People bought shares at those inflated prices based on the idea that Facebook was the new Google. It isn’t.

“Google’s display revenues alone this year will be larger than Facebook’s entire revenue.”

Having sold shares at $38 each on May 17, they tumbled as much as 12 per cent to $23.75 in extended trading in New York. David Ebersman, Facebook's chief financial officer, said that "we are disappointed how the stock is trading".

As had been forecast, the cost of share-based pay plan for employees saw Facebook report an overall loss of $157m for the quarter. But as founder and chief executive Mark Zuckerberg made an appearance on the company's conference call with Wall Street analysts on last night night, the focus was squarely on how quickly the social network site will be able to drive revenues.

Zuckerberg and Sheryl Sandberg, Facebook's highly-regarded chief operating officer, were at pains to stress that the company had introduced several initiatives to squeeze more revenue from a base of users that grew 29 per cent to 955m by the end of the quarter. That included the launch of advertising known as ‘sponsored stories’ in the newsfeeds that Facebook users get when they access their accounts. By the end of June, they were generating about $1m a day in advertising, with half of that coming from mobile devices, said Sandberg. Total advertising revenues rose 28pc to $992m in the quarter.

“The issue is Facebook’s revenue growth which has slowed down over the last 12 months and the real worry is it’s not going to be able to turn it around. Plus the revenue per user is pretty flat.

“But its biggest problem is monetising mobile. As more and more of its users access Facebook on mobiles, the social network must prove it can monetise mobile if it is to dramatically grow revenues. So far it has not proved it can monetise the small screen. Sponsored stories are a start, but we are very sceptical about display adverts on the mobile screen.”

Last night Zuckerberg denied reports that Facebook was considering building its own phone, arguing it "wouldn't make much sense for us".

Facebook said the number of users of its and apps for smartphones and tablets was growing quicker than the number of adverts it is serving up because it has not developed its mobile advertising strategy.

“We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users increasing more rapidly than the increase in the number of ads delivered,” a Facebook spokesman said at the time.

However, Vanessa Barnett, technology and media partner at law firm Charles Russell, sees the social network's maiden results as a public company in a more positive light. She said: “The high level picture is that [Facebook’s] revenue is up, hitting 1.18 billion dollars. That is a business success, whichever way you cut it.

"There will be many Facebook 'Grinches' that linger on the two key negatives (margin down from 53 per cent to 43 per cent and that costs and expenses up by almost 300%) but their schadenfreude would be entirely misplaced. Margin will for the moment be trickier because there is less space on mobile to view ads. Costs and expenses are obviously up because of payments arising out of employee share schemes and the IPO.

"I see the results very positively and in the context of the internet market as a whole. Everyone is using Facebook, everyone is going mobile in terms of how they connect with their friends and how they consume information and content. Facebook has become a utility in our daily lives and now it's really about how Facebook executes on that.

"The results reveal some positive data that Facebook is heading in the right direction, in particular there are impressive statistics on return on investment in advertising, which 49% of audited campaigns returning five times spend. This is impressive. Alongside that Facebook continues to innovate for users, for example, purchasing Instagram, launching Facebook Exchange - all steps towards success and growth.”